9) The Ongoing Housing Crisis - The Obama administration has been far more concerned with helping bankers avoid the consequences of their bad and potentially illegal loans, than with rescuing underwater homeowners. The programs set up to help homeowners have been poorly promoted or ineptly administered, so that most underwater homeowners have not taken advantage of them.
Financial experts are saying that it will now be difficult for Obama to shift to a regulatory focus on bankers. No bankers have gone to prison for the major role they played in creating the housing mess.
10) No Adverse Regulatory Climate for Big Business - It is not likely that big business would face an adverse regulatory climate in an Obama second term. Obama notably wrote an op-ed published in the New York Times, in which he warned against placing regulatory controls on business. One of the prime reasons that Obama rejected the new smog rules that the EPA was going to put into effect, was because they would add too much to the cost of the industries chiefly responsible for causing the smog.
One of the reasons that the Dodd-Frank legislation is criticized as being too weak to control business malpractice is that Obama did not press for stronger regulation. Even in regard to the creation of the new consumer protection agency, Obama reportedly wanted to lodge it in the Federal Reserve system, where consumer protection advocates argued it would lose the independence it should have as a stand-alone agency.
11) All Over the Waterfront on Taxes and Spending - President Obama has been all over the waterfront regarding taxes and spending. The best source of his long-term view is the 12-year plan, in which he proposes $4 trillion in deficit reduction, of which only $1 trillion will come from tax increases and only $400 billion will come from military spending cuts. Domestic spending will be hit the hardest.
This initial 3-to-1 ratio of spending cuts to increased revenue was widened significantly when Obama put Social Security, Medicare and Medicaid on the table in the negotiations on raising the debt ceiling.
President Obama subsequently endorsed other proposed long-term spending and taxation plans even before the ink was dry on them: them: the Reid plan and the "Gang of Six" plan were most prominent among these. The "Gang of Six" plan was particularly recklessly and sloppily written. It would have eliminated the Alternative Minimum Tax, causing a substantial revenue loss in the future; also, it set the top marginal tax rate in a range of 23 to 29 percent. Presumably, a future legislative action could have set the top rate as low as 23 percent. Even at 29 percent it would have been a huge giveaway to the top bracket people now paying 35 percent.
President Obama devoted much of his tax talk in July 2011 to calling for the closing of tax loopholes; in contrast, there was virtually no mention of allowing the Bush tax cuts to expire. Of course, Obama's agreement to a two-year extension of the Bush tax cuts has caused a big loss in revenue and broke a signature campaign pledge not to extend them.
President Obama's jobs package unveiled in September 2011 changed the tax equation once again. Obama has broken the package into "bite-sized pieces;" has agreed to drop the payroll tax cut for employers; and has accepted a surcharge on income over $1 million as a new funding mechanism -- subsequently abandoned by the Democratic legislative leadership. .
Given that President Obama is arguing that a failure to extend the payroll tax is a tax increase for about 160 million wage earners, he will find it hard to argue against another payroll tax cut and even an extension of the Bush tax cuts if economic conditions remain dire in late 2012.
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